Sector ETF & Stock Winners 10-Years Since Great Recession

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When the housing market bubble burst in December 2007 causing a credit market crisis, the United States officially entered into its worst recession since the Great Depression. A decade has passed and the American economy has finally recovered from the crash that lasted till June 2009.

In fact, the United States is on the way to accelerated growth, with GDP rising to 3.3% in the third quarter of 2017. In comparison, GDP contracted 4.3% between late 2007 and mid-2009. The growth is being powered by robust job gains, rising wages, increasing consumer spending, recovering housing market and a record level of consumer confidence (read: 5 ETFs to Soar After Solid Q3 GDP Data).

Insights Into Numbers

Employers started adding jobs in 2010 and recovered 8.7 million jobs lost between the start of the recession in December 2007 and early 2010. The economy has added 188,000 jobs per month from March 2010 through October 2017 while the unemployment rate has fallen to a 16-year low to 4.1% from 10% in October 2009. Meanwhile, the manufacturing sector, which accounts for about 12% of U.S. economic output, is now much better than what it was 13 years back.

The housing market has shown solid signs of recovery, with home price rising 6.1% in the 12 months ended in August to all-time highs, per the S&P CoreLogic Case-Shiller National Home Price Index. This was the biggest annual increase since June 2014. Low mortgage rates are making homes affordable (read: Homebuilder ETFs in Focus on Upbeat Data).

Additionally, Americans have an optimistic view of the economy with confidence hitting the highest level in more than 17 years. The Conference Board's measure of consumer confidence soared to 129.5 in November 2017 from 25.3 in February 2009.

Given an improving economy, the stock market is also booming with a series of milestones this year. The S&P 500 is in the midst of the second-largest bull run and even broke the 2,600 milestone last month. The benchmark bottomed out at 676.53 on Mar 9, 2009 (read: S&P 500 Tops 2600: ETFs & Stocks That Deserve Special Thanks).

This year gains were driven by strong corporate earnings, the improving health of economies around the world, the Trump effect, and a rebound in oil price. Additionally, the Fed’s rate hike signals a strengthening economy, which is fueling further growth in the stock market. Notably, corporate earnings have made a strong comeback in the fourth quarter of 2017 reaching an all-time quarterly record with the highest growth in two years.

Winners

While most of the sectors have flourished over the past decade, consumer discretionary and information technology have led the way per Zacks, generating returns of 114.2% and 93.8%, respectively. This was followed by gains of 67% for consumer staples and 44% for healthcare.

We have highlighted the best ETFs & stocks from these sectors in the same time period and are also expected to continue their uptrend in the coming years for as long as the bullish fundamentals prevail. These have a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold).

Consumer Discretionary

The sector currently has a solid Industry Rank in the top 44% and the best performer is Netflix NFLX, the world's leading Internet television network engaged in the Internet delivery of television (TV) shows and movies on various Internet-connected screens. It has skyrocketed more than 5,400% in the past decade. The stock has Zacks Rank #3 and a VGM Score of F.

The sector boasts a solid industry rank in the top 19%. Stamps.com Inc. STMP, a leading provider of Internet-based postage services, soared more than 1,200% over the past decade. It has a Zacks Rank #3 and a VGM Score of B.

Constellation Brands STZ, with a Zacks Rank #2 and a VGM Score of C, gained nearly 807% in the last 10 years. It is a leading producer and marketer of beverage alcohol brands, with a broad portfolio across the wine, spirits and imported beer categories, and operates in the U.S., Canada, Mexico, New Zealand and Italy.

In the ETF world, only PowerShares DWA Consumer Staples Momentum Portfolio PSL has a Zacks Rank #3. It provides exposure to stocks having positive relative strength (momentum) characteristics by tracking the DWA Consumer Staples Technical Leaders Index. The fund has gone up 126.4% in the last decade. Investors should note that the consumer staples sector currently has a dismal Industry Rank in the bottom 38% (read: Top-Ranked Sector ETFs & Stocks for Q4).

Healthcare

Healthcare also has an ugly Industry Rank in the bottom 31%. However, Regeneron Pharmaceuticals, Inc. REGNis the showstopper, having gained more than 1,460% over the past decade. This is a biopharmaceutical company that discovers, develops, and intends to commercialize therapeutic medicines for the treatment of serious medical conditions. The stock has a Zacks Rank #3 and a VGM Score of C.

In the ETF world, First Trust NYSE Arca Biotechnology Index Fund FBT gained the most, retuning nearly 388%. The fund follows the NYSE Arca Biotechnology Index, which measures the performance of a cross section of companies in the biotechnology industry that are primarily involved in the use of biological processes to develop products or provide services. It has a Zacks Rank #3 (read: Biotech ETFs: What Lies Ahead?).

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